Disagreement between European countries over Libya has moved from the merely embarrassing to the wholly humiliating, after Germany again blocked Anglo-French no-fly zone proposals at a G8 meeting in Paris. The EU's Libya debacle is now the foreign policy equivalent of last year's eurozone meltdown, and similarly damaging to its global credibility and influence. Once again, Europe is being forced to confront an unpalatable truth: unless the US takes the lead, nothing gets done. Europe has not been entirely passive in the face of Muammar Gaddafi's accelerating counter-attack on rebel forces. The EU has imposed sanctions, frozen the assets of leading figures and backed an arms embargo. It has also loudly proclaimed that Gaddafi must go. But these measures have made no appreciable difference on the ground.

On the question of military intervention, there are almost as many opinions as there are EU members. Britain and France are the most outspoken advocates of a no-fly zone. Germany has been the most vocal opponent. Italy – Libya's former colonial power – havers and trims like a Berlusconi defence lawyer. Last week's EU summit refused to back a no-fly zone. So did Nato. Today's G8 communique does not even mention it.

Alain Juppé, France's foreign minister, suggested Europe had left it too late to stop Gaddafi winning. "If we had used military force last week to neutralise some airstrips and the several dozen planes that they have, perhaps the reversal taking place to the detriment of the opposition wouldn't have happened," Juppé told Europe-1 radio. "But that's the past. What is happening today shows us that we may have let slip by a chance."

A new UN security council resolution, being prepared by France, Britain and Lebanon, could include tighter sanctions, some form of maritime blockade and a threat to impose a no-fly zone at a future date. But none of these steps seems likely to deter Gaddafi, either.

Similarly, Downing Street says Britain favours curbs on Gaddafi's use of African mercenaries and expropriation of oil revenues. But this will not prevent the fall of Benghazi or the murderous reprisals that will certainly follow a regime victory – and David Cameron must surely realise that.

The reasons for Europe's disarray are familiar. German chancellor Angela Merkel's refusal to get involved is an echo of the "Germany first" attitude that has so annoyed economically struggling EU partners such as Ireland and Greece. It is not as though Germany is a significant military power these days. Its forces would not take a leading role in any intervention, any more than they did in Afghanistan. But Berlin worries its current membership of the UN security council might suck it in.

Speaking at the EU summit last week, Merkel lambasted France's recognition of the Libyan rebels' transitional council as Libya's government, according to Der Spiegel. She was also scathing about the Anglo-French no-fly zone idea. "What is our plan if we create a no-fly zone and it doesn't work? Do we send in ground troops?... We have to think this through. Why should we intervene in Libya when we don't intervene elsewhere?"

While the Germans are accused of selfish short-sightedness, Nicolas Sarkozy, the French president, is accused of self-aggrandisement. Sarkozy, it is claimed, backs intervention in Libya not because of some notion of a glorious democratic future but because he is anxious to bolster traditional French influence in a post-awakening north Africa – and was galled by his government's misjudgment of the Tunisian revolt. Meanwhile, Italy, a close Gaddafi partner in the past, suggests Russia will block an NFZ at the UN, so why bother?

Addressing the Commons this week, Cameron made a persuasive case for strong action serving all of Europe's interests. "Do we want a situation where a failed, pariah state festers on Europe's southern border, potentially threatening our security, pushing people across the Mediterranean and creating a more dangerous and uncertain world for Britain and for all our allies, as well as for the people of Libya?" he asked.

Whether or not military intervention is thought a good idea, the answer to Cameron's question is clearly "no". To his proposition, as stated, Merkel surely has no answer. Yet Britain and France still hesitate, even though together they control most of Europe's fighting forces. They say they need legal justification for military intervention, that they need Arab support. Both are true. They would certainly prefer unanimous EU support. But the real reason they and other like-minded countries hold back is the refusal of the Obama administration to take the lead.

Thus are the EU's pretensions to act as an independent global power once again cruelly exposed. Europeans live closer to Libya than Americans. Like Bosnia, it's on their patch. It's their problem. But without the US, it seems, they cannot help themselves.